Question:
Calculate the amount due if Jennifer borrowed a sum of $3250 at 7% simple interest for 4 years.
Correct Answer
$4160
Solution And Explanation
Solution
Given,
Principal (P) = $3250
Rate of Simple Interest (SI) = 7%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% per annum.
Method (1) Using Formula
Calculation of Simple Interest
Formula to Calculate Simple Interest
Simple Interest (SI) = Principal × Rate × Time
Thus, Simple Interest (SI) = $3250 × 7% × 4
= $3250 ×7/100 × 4
= 3250 × 7 × 4/100
= 22750 × 4/100
= 91000/100
= $910
Thus, Simple Interest = $910
Calculation of Amount
The total money paid to the lender by a borrower is called the Amount.
In other words, sum of priciple and interest is called the Amount.
Formula to Calculate the Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $910
= $4160
Thus, Amount to be paid = $4160 Answer
Method (2)
Calculation of Amount when Principal, Rate of Simple Interest and Time are given
Calculation of Amount directly using Principal, SI, and Time
Formula to calculate the Amount
Amount (A) = Principal (P) + Principal(P) × Rate of Interest (SI) × Time (t)
⇒ A = P + PRT
Here in the question, P = $3250
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 4 years
Thus, Amount (A)
= $3250 + ($3250 × 7% × 4)
= $3250 + ($3250 ×7/100 × 4)
= $3250 + (3250 × 7 × 4/100)
= $3250 + (22750 × 4/100)
= $3250 + (91000/100)
= $3250 + $910 = $4160
Thus, Amount (A) to be paid = $4160 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 7%
This, means, $7 per $100 per year
∵ For $100, the simple interest for 1 year = $7
∴ For $1, the simple interest for 1 year = 7/100
∴ For $3250, the simple interest in 1 year
= 7/100 × 3250
= 7 × 3250/100
= 22750/100 = $227.5
Thus, simple interest for 1 year = $227.5
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $227.5 × 4 = $910
Thus, Simple Interest (SI) = $910
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $910
= $4160
Thus, Amount to be paid = $4160 Answer
Similar Questions
(1) How much loan did Sarah borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6435 to clear it?
(2) Calculate the amount due if Sarah borrowed a sum of $3850 at 4% simple interest for 4 years.
(3) How much loan did Donna borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8220 to clear it?
(4) In how much time a principal of $3200 will amount to $3584 at a simple interest of 4% per annum?
(5) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 9% simple interest.
(6) Patricia took a loan of $4300 at the rate of 9% simple interest per annum. If he paid an amount of $8170 to clear the loan, then find the time period of the loan.
(7) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 8% simple interest?
(8) What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 6% simple interest?
(9) Calculate the amount due after 9 years if Susan borrowed a sum of $5650 at a rate of 4% simple interest.
(10) Ashley had to pay $4959.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.